Social networks rights over its users personal data

The topic of personal data can be, to a certain extent, compared to one of Hitchcock’s films, where disturbing music can be heard and a sense of growing tension can be felt, but until the very last moment almost nothing happens or, should something happen, there is still no final certainty which arises. Now, the understanding of the importance and future prospects of this industry are becoming more and more obvious, but its reflection in the legal sphere, in particular its legal regulation, still leaves much to be desired.


In practice, both large social media companies and small, developing fintech companies are facing issues more and more often, not to mention the consumers, in this regard, it seems particularly interesting to briefly consider one of the most significant cases in Russia, in which, as in Hitchcock’s films, the tension is growing, but the final outcome has not yet come.


Social network “VKontakte” against the start-up ” Double»


“VKontakte”, being one of the largest social networks in Russia, which can be compared in popularity in Russia with” Facebook “globally, filed a claim against “Double”, the developer of software for the analysis of personal data and its further sale to financial institutions to assess the creditworthiness of borrowers. The requirement was to prohibit the Respondent from using the open personal data posted by users of VKontakte in the social network to check the information provided to the Bank and to make a further forecast about the probability of repayment of the loan.


The position of “VKontakte” is based on the idea that a huge database of users, formed over the course of its existence, belongs exclusively to the social network and that no one can use this database without obtaining its special permission. In general, this position corresponds to the general approach of intellectual property rights protection, but from the point of view of technology development, such a solution can have a very strong negative impact, since many modern applications are based on personal data, therefore, the market for small and medium-sized players may be lost once and for all.


Being one of the representatives of such a service market, “Double” bases its position on a number of arguments derived in the course of a more detailed analysis of the situation. For example, the company has stressed that the database of “VKontakte” was formed as a by-product, as the main activity of the company is related to the organization of communication between users, not the collection of information about them and did not require separate investments in the search, collection and verification of data. Therefore, the confirmation of the network’s ownership over this data is not a protection of special investments, but it may lead to an unjustified monopoly of the company over a large amount of information.


All of these discussions has also particular importance in the light of the fact that in January 2018 the Federal Anti-monopoly Service of the Russian Federation submitted a draft of the Fifth Anti-monopoly Package, the purpose of which is to establish anti-monopoly regulation in digital markets. The project is still under discussion, but for now a number of large companies have already shared their concerns about its future application.


As for the case of “VKontakte” against “Double”, the final decision has not been made yet, although the atmosphere is thickening. At the beginning, the court of first instance supported the position of “Double”, but then the court of appeal satisfied the claim of “VKontakte”. Currently, the case is pending in Court for Intellectual Property Rights and we all, with bated breath, are waiting for its decision.


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